German exports rose 0.3% in May from the month before, raising hopes of a tentative economic recovery.Imports declined 2.1%, pushing Germany's trade balance to a surplus of 10.3bn euros ($14.4bn; £8.9bn), the highest since December 2008. However, exports were still 24.5% lower than a year ago, with Germany enduring its worst recession since World War II. Analysts said the data raised hopes that exports would continue to improve in the coming months.
German exports rose 0.3% in May from the month before, raising hopes of a tentative economic recovery.
Imports declined 2.1%, pushing Germany's trade balance to a surplus of 10.3bn euros ($14.4bn; £8.9bn), the highest since December 2008.
However, exports were still 24.5% lower than a year ago, with Germany enduring its worst recession since World War II.
Analysts said the data raised hopes that exports would continue to improve in the coming months.
General Motors has emerged from bankruptcy - just 40 days after the US vehicle manufacturer signed a government-backed rescue deal, the company has announced.The main assets of the troubled auto giant, which was once the world's largest coroporation, have been transferred to a new company which will be 61 per cent owned by the government. "Today marks a new beginning for General Motors," Fritz Henderson, the chief executive of GM, said on Friday."One that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers. "We recognise that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done."
General Motors has emerged from bankruptcy - just 40 days after the US vehicle manufacturer signed a government-backed rescue deal, the company has announced.The main assets of the troubled auto giant, which was once the world's largest coroporation, have been transferred to a new company which will be 61 per cent owned by the government.
"Today marks a new beginning for General Motors," Fritz Henderson, the chief executive of GM, said on Friday."One that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers.
"We recognise that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done."
The SUVs aren't where the money's going to be, at least not as they're currently constituted, and GM knows it. (They may have a place as battery technology continues to improve. Chrysler, for example, is working on an electric Jeep Wrangler 4-door that can do 40-50 miles on a charge, which would make it gas-free to most people. If it can be made affordable, the technology could be a game-changer.) In fact, if I'm not mistaken, one of their best-selling things right now is the new Camaro, which isn't God's gift to fuel-efficiency, but I'm guessing it's profitable, and it, along with others things, should keep their cash flow going long enough for the Cruze, Spark, Volt, and other things to come online.
At the very least, GM now has a fighting chance to stay afloat, retool to deal with new realities, and eventually get back to expanding as these new technologies are made cheaper by economies of scale and new innovations.
I also, having thought about it a bit more politically, think I and others (including Michael Moore) were wrong about what to do with GM -- about the idea of turning it into a national manufacturer of whatever we want. We're not always going to be in power, and I think there's a real risk that it would eventually result in GM being destroyed, just as administrations have done, for ideological reasons, to every other government enterprise in this country. Which means we'd lose all those jobs in a steady drip rather than in a big bang (the way we would've if McCain had won last November).
The whole situation sucks for everybody, but I think this is about as well as we could hope to do, and if it works, it will go down as one of the great untold stories of the period. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Fact is, new car sales have fallen through the floor globally. Everybody is suffering, practically every manufacturer is swallowing losses and, while I totally buy the political argument, I just don't see what GM can offer to stay in business. keep to the Fen Causeway
What I also know is that the Rust Belt has been shit on for a long time. Their economy has been savaged by 30 years of GOP and Clintonista dominance. Here, for the first time in God-knows-how-long, the President -- even if he is likely to be a failure on other counts -- is at least making some effort to right the ship for them (and is willing to pay a price on his popularity elsewhere to do it). We're out $50bn. We may never make it back, but, really, isn't $50bn a small price to pay for at least getting them a shot to bring this stuff online and do something?
This is to say nothing of possible political dividends down the road. If the automakers are saved -- let alone if they eventually start leading again -- and the Rust Belt doesn't completely collapse, our side of the aisle could wind up pretty much owning the White House for decades, which opens up the prospect of making gains in many other areas of policy over those decades.
For a very tiny fraction of GDP, that's a lot of upside. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
The trick at GM is to find a profitable niche, and it might be SUVs and pickup trucks. Or it might be small cars, but that would require lots and lots of engineering work which will be difficult with GM having made much of their engineering staff redundant...
And without funding the thugs in Saudi Arabia. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
And as it was a diesel I guess it didn't require more fuel than your average Volvo. Peak oil is not an energy crisis. It is a liquid fuel crisis.
I'm more just guessing, though. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Which, due to expectations on an SUV, meant it felt really, really cramped with four people. My knees were jammed up against the front passenger seat, and I'm not exactly big.
I'm not big on the crossovers. I like cars and trucks. Blending the two feels weird icky. My father drives a Toyota Tundra, and he drove a Chevy Suburban for years (which I learned to drive in). Those were both much, much too big for me. Anything with a V8 is like driving a shopping mall.
But I don't like having the car-like near-horizontal windshield that crossovers tend to have. I like it nearly vertical, because I feel like I can see a lot better.
We traded in our Honda for an FJ Cruiser a few months ago. (Before y'all start throwing things at me, I want you to know it was not my choice, since I take the train and drive maybe 20 times per year.) The mileage blows, although I can usually push it up quite a bit vs the EPA estimates due to the fact that I drive in a way that would make an old lady look like a Nascar driver.
I'm trying to convince her to let my friend and I convert it sometime in the next year or two to either biomass, electricity or hydrogen (all of which you can get in DC). She's convinced we'll destroy it.
Still, it drives really nicely. I like it. If they'd make an electric one, I'd trade this one in and buy it in a heartbeat. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
And as I said previously, this cars is fun, it's not a tool for commuting. Commuting is supposed to be done by rail, and if people did it that way there'd certainly be enough fuel around for the Sunday trip in a little bigger car. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Simon Johnson sums up the recent G8 in part as "lamer than advertized" and in total as "an expensive flop." He complains that the issue of cross border resolution for failed banks didn't even come up. But he reserves his harshest criticism for Brown and Sarkozy's joint article Wednesday in the WSJ on the role of speculation in the oil market, which he finds to be disingenuous.
>But, more generally, the G8 - and its members this week - are disingenuous when they speak about energy prices, in three ways. They are trying hard to talk up the market, with regard to global growth. At the same time, the hard data continue to disappoint. Naturally, this causes volatility in oil prices. They claim to see no link between their failure to converge on climate change/environmental policies and what happens to energy prices. The extent to which industrialized countries' effectively control carbon emissions will have a big impact on the longer-run demand for oil. Flip-flopping on this issue discourages investment in the energy sector (regular and alternative), and thus directly and indirectly contributes to oil price volatility. The very cheap money policies of leading central banks, including the Fed, the Bank of England and arguably also the European Central Bank, lower the funding costs for big players who want to take large positions in commodities markets. Essentially, we are providing the credit that makes big speculative positions possible. Add to this mix a "too big to fail" attitude and a "yes we can, recapitalize through trading profits" deal with policymakers, and you see why major financial firms are likely to place huge commodity bets in the months ahead. The G8, separately and jointly, destabilizes energy prices and refuses to even talk about this reality - taking the view that being more candid would just upset consumer, business, and investor confidence. They gamble, on energy and more broadly, that the road to recovery runs parallel with pretending there are no problems. The true speculators here are your elected representatives.
The true speculators here are your elected representatives.
They don't know any better and neither do their economic advisors. The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.
The idea is that there would be a crime called bankslaughter, or "managing a bank irresponsibly." If a bank blows up, there could be a criminal investigation to determine if the bank managers behaved recklessly (more on that term later); if so, they would be convicted. The analogy is to manslaughter, which is actually a family of crimes; Collier probably means criminally negligent homicide, or causing death through negligent or reckless (more on those terms later) behavior. Not surprisingly, the conservatives are not happy about this, even though it seems to conform to the conservative principle that people should bear responsibility for the consequences of their actions. (Or maybe that only applies if you are a pregnant teenager.) Salmon cites John Carney, who calls bankslaughter "the worst idea of the week."
Not surprisingly, the conservatives are not happy about this, even though it seems to conform to the conservative principle that people should bear responsibility for the consequences of their actions. (Or maybe that only applies if you are a pregnant teenager.) Salmon cites John Carney, who calls bankslaughter "the worst idea of the week."
Carney complains that Collier hasn't given enough thought to the consequences of "over-deterence", that is is unfair that only those whose risky bets blow up get investigated and that the investigations would be backward looking, while business is forward looking. Kwak isn't having it. Even with only one year of law school at Yale, Kwak can blow this critique out of the water.
Regular readers can guess what I think of the idea of "over-deterrence." We need some more over-deterrence. People can talk all they want about "socially beneficial risk taking," but the evidence that this happened during the last thirty years is pretty contestable. For a system to have the optimal amount of risk taking, it is necessary (but not necessarily sufficient) that the people who stand to benefit from the venture internalize the risk of failure in some way; as everyone on the Internet has written multiple times, that condition did not hold for the financial sector in all sorts of ways. But the more interesting argument is whether there is a problem with retroactively holding people liable for harm that they cause unintentionally. Carney writes as if this is just a crazy idea: first, only the people who actually cause harm are prosecuted, as opposed to others who behave equally egregiously but are lucky enough not to cause harm; second, it allows juries to evaluate behavior in the past with the benefit of hindsight. What he doesn't say is that this is exactly how a huge chunk of our legal system works today. It's called torts, and even though I've only had one year of law school, and that was at Yale, where the joke is that you don't actually learn any law, I know something about it. The general principle is that in most spheres of life, if you act negligently - defined to mean that you do not exercise the same degree of care a reasonable person would under the circumstances - and your action causes injury to someone else (to whom you owe a duty of care), you are liable for that injury. In some areas, the threshold is lower; for example, in product liability, the rule of strict liability applies, which means that you don't even need to be negligent; if your product hurts someone, you're liable. In other areas, the threshold is higher, and the requirement is not just negligence, but gross negligence, or willful wanton recklessness, or something like that. But that's the basic principle; you don't need intent, and the legal system certainly does assign liability after the fact. Ironically enough, the modern tort system is a product of the second industrial revolution of the late nineteenth century, and was designed to cater to the needs of large businesses. By creating an objective, supposedly predictable and stable standard of negligence, it made it easier for businesses to manage the risks of their operations. And while there are certainly things they criticize, tort law is one of the main areas where the law-and-economics crowd has won out, and real judges actually talk about things like "cheapest cost avoiders." For many scholars and jurists, the standard of reasonable care is defined as the degree of care such that the marginal benefit of accident avoidance equals the marginal cost of care; you can see how, in a tautological way, this creates a Panglossian "best of all possible worlds," since it yields the perfect degree of deterrence. And the reason most economist types (and free marketers) like this way of thinking about tort law is that the whole point of the law is to create the right incentives without the need for all sorts of detailed regulation. So Carney's idea that this type of liability would produce over-deterrence is a bit curious. To get optimal deterrence in the bank-management context, you want managers to take precautions (e.g., maintain capital reserves) up to the point where the marginal reduction in the risk of a collapse is balanced by the marginal cost of those precautions. Today, we have no such thing, since we have no meaningful risk of collapse for bank managers, since their downside (relative to their upside) is limited by (a) leverage, (b) the implicit government guarantee, (c) the bonuses they got in the good years, and (d) the "resume put." Because there is no liability for blowing up a bank, our legal system provides no deterrence whatsoever, which is one reason why we need regulation. (In a perfect law-and-economics world, you wouldn't need regulators, since the threat of liability would create optimal behavior all by itself.)
But the more interesting argument is whether there is a problem with retroactively holding people liable for harm that they cause unintentionally. Carney writes as if this is just a crazy idea: first, only the people who actually cause harm are prosecuted, as opposed to others who behave equally egregiously but are lucky enough not to cause harm; second, it allows juries to evaluate behavior in the past with the benefit of hindsight.
What he doesn't say is that this is exactly how a huge chunk of our legal system works today. It's called torts, and even though I've only had one year of law school, and that was at Yale, where the joke is that you don't actually learn any law, I know something about it. The general principle is that in most spheres of life, if you act negligently - defined to mean that you do not exercise the same degree of care a reasonable person would under the circumstances - and your action causes injury to someone else (to whom you owe a duty of care), you are liable for that injury. In some areas, the threshold is lower; for example, in product liability, the rule of strict liability applies, which means that you don't even need to be negligent; if your product hurts someone, you're liable. In other areas, the threshold is higher, and the requirement is not just negligence, but gross negligence, or willful wanton recklessness, or something like that. But that's the basic principle; you don't need intent, and the legal system certainly does assign liability after the fact.
Ironically enough, the modern tort system is a product of the second industrial revolution of the late nineteenth century, and was designed to cater to the needs of large businesses. By creating an objective, supposedly predictable and stable standard of negligence, it made it easier for businesses to manage the risks of their operations. And while there are certainly things they criticize, tort law is one of the main areas where the law-and-economics crowd has won out, and real judges actually talk about things like "cheapest cost avoiders." For many scholars and jurists, the standard of reasonable care is defined as the degree of care such that the marginal benefit of accident avoidance equals the marginal cost of care; you can see how, in a tautological way, this creates a Panglossian "best of all possible worlds," since it yields the perfect degree of deterrence. And the reason most economist types (and free marketers) like this way of thinking about tort law is that the whole point of the law is to create the right incentives without the need for all sorts of detailed regulation.
So Carney's idea that this type of liability would produce over-deterrence is a bit curious. To get optimal deterrence in the bank-management context, you want managers to take precautions (e.g., maintain capital reserves) up to the point where the marginal reduction in the risk of a collapse is balanced by the marginal cost of those precautions. Today, we have no such thing, since we have no meaningful risk of collapse for bank managers, since their downside (relative to their upside) is limited by (a) leverage, (b) the implicit government guarantee, (c) the bonuses they got in the good years, and (d) the "resume put." Because there is no liability for blowing up a bank, our legal system provides no deterrence whatsoever, which is one reason why we need regulation. (In a perfect law-and-economics world, you wouldn't need regulators, since the threat of liability would create optimal behavior all by itself.)
(It would seem that this Carney is reluctant to reign in the carnival atmosphere that brought us to this pass for fear that it would spoil future carnivals.)
Qwak then proceeds to refine the idea by suggesting that "bankslaughter" be a civil offense which would put at risk the personal assets of the banker charged and suggests that the criterion be that of what a reasonable banker would do, violation of which would result in charges of negligence. He would reserve the criminal charges for fraud. He goes on to note that "the business judgement rule", which states that "that if you are a manager who makes an informed decision in a situation where you do not have a conflict of interest, you are not liable, period, no matter how risky or stupid that decision is", is an obstacle and that, amazingly, "no court has ever held that having a bonus tied to your company's stock price, with no commensurate downside risk, counts as a conflict of interest (even though it is)." But this is common law which could be readily superseded by statute.
Come the day. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
